South Korean trading firm Daewoo International offered to sell 50,000 tonnes of wheat to Bangladesh for $325.45 a tonne, the lowest offer in a tender that opened on Thursday, an official at the state grains buyer said.
The price included freight, insurance and other expenses. Six trading companies competed for the tender that was issued last month in an effort to boost government reserves, now at five-year lows.
The offer has to be approved by the cabinet’s purchase committee after verification, with the grain to be shipped within 40 days of signing the deal.
This was the highest price the agency will pay in tenders in the current financial year, that started in July, and sharply up from the previous tender in January that was won by Glencore at $303 a tonne.
Chicago wheat lost more ground on Thursday to trade near a three-week low as improved weather from the United States to Australia eased concerns over global supplies, triggering a wave of selling.
In its current purchase programme, Bangladesh’s state grains buyer has so far bought or agreed to buy 550,000 tonnes of wheat in tenders. It also imported 200,000 tonnes of wheat in a government-to-government deal with Ukraine at $307 a tonne in October.
“Our food situation is now in better state. We don’t need to worry about reserves.” Ahmed Hossain Khan, head of the state grains buyer.
“Instead we are now trying to release rice and wheat from the stocks to make space as local rice procurement drive begins next month,” he said.
Bangladesh’s government imports wheat to run welfare programmes for the poor and to keep domestic prices stable. Its reserves have dropped to around 1 million tonnes from 1.4 million tonnes a year earlier.
In the previous financial year that ended in June, the state grains buyer could not achieve its import target of 800,000 tonnes mainly because traders failed to supply wheat on time. For this financial year, it has introduced tougher delivery rules to ensure supplies are delivered on time by the tender winners.